Spaniards are burning through their savings at the fastest rate in more than ten years, in a sign that the effects of the banking crisis may yet worsen as more consumers’ resources are drained. Savings by Spanish homes dropped in the first quarter compared with a year earlier, the National Statistics Institute said. Spaniards are caught between falling income and higher tax payments: disposable income dropped 1.3 percent as tax and charges climbed 5.8 percent, the statistics office said. Outgoings exceeded income by 911 million euros, which was funded principally by savings as borrowing criteria tightened.
A year ago savings stood at 2.7 percent of disposable income after peaking at more than 20 percent in mid 2009. Spaniards had been able to save part of their income in every quarter since 2000, when the INE’s savings data was first collected. Saving rates are typically lowest in the first quarter and highest in the second or fourth quarters.
Shorter term, the economic outlook may have improved. Jobless claims in June, before the start of the peak tourism season, fell by more than 98,000, the biggest decline in the month since the series began in 2005, Esteban Duarte and Emma Ross-Thomas reported. Still, the country’s jobless rate of 24.6 percent is the highest in the European Union and will take much more than a healthy tourism season to repair.